MacMillan – Gigaomhttp://gigaom.com
The industry leader in emerging technology researchThu, 08 Dec 2016 20:14:32 +0000en-UShourly1Macmillan, too, returns to agency pricing with Amazonhttp://gigaom.com/2014/12/18/macmillan-too-returns-to-agency-pricing-with-amazon/
http://gigaom.com/2014/12/18/macmillan-too-returns-to-agency-pricing-with-amazon/#commentsThu, 18 Dec 2014 16:46:53 +0000http://gigaom.com/?p=901488Book publisher Macmillan, like Simon & Schuster and Hachette before it, has signed a new contract with Amazon and will return to agency pricing on its ebooks starting in 2015. In a public letter to authors and agents, Macmillan CEO John Sargent also said Amazon’s dominance in the ebook marketplace is a problem and that the publisher will experiment with ebook subscription models as a way to diversify its revenue streams.

Macmillan’s settlement with the Department of Justice in the [company]Apple[/company] ebook pricing case required it (and the four other settling publishers) to allow retailers to offer unlimited discounts on its ebooks for two years. Now the two years are up and publishers are returning to agency pricing agreements with Amazon. Under agency pricing, the publisher sets an ebook’s price and the retailer takes a commission. The negotiations between Amazon and publisher Hachette were highly fraught and public, but Macmillan’s were much quieter.

Sargent wrote:

“Late last week Macmillan reached an agreement with [company]Amazon[/company] on a multiyear deal for print books as well as a multiyear deal on the agency model for e-books, starting on January 5, 2015. All our other retailers will also be on the agency model, leaving Apple as the only retailer who is allowed unlimited discounting. Irony prospers in the digital age.

This odd aberration in the market will cause us to occasionally change the digital list price of your books in what may seem to be random fashion. I ask for your forbearance. We will be attempting to create even pricing as best we can.”

Apple can offer unlimited discounts on ebooks because, as a result of the settlements, publishers weren’t allowed to negotiate new contracts with it for five years. Macmillan and Simon & Schuster are appealing that decision and were in appeals court to argue their position last week.

In his characteristically forthright letter, Sargent also noted that

“In reaching agreement with Amazon, we have not addressed one of the big problems in the digital marketplace. Through great innovation and prodigious amounts of risk and hard work, Amazon holds a 64% market share of Macmillan’s e-book business. As publishers, authors, illustrators, and agents, we need broader channels to reach our readers.”

As a result, Sargent wrote, Macmillan will be testing ebook subscriptions: “We plan to try subscription with backlist books, and mostly with titles that are not well represented at bricks and mortar retail stores.” While Sargent didn’t say which companies Macmillan will be working with, Oyster and Scribd are likely candidates.

]]>http://gigaom.com/2014/12/18/macmillan-too-returns-to-agency-pricing-with-amazon/feed/1Judges question Apple ebook verdict and Amazon’s rolehttp://gigaom.com/2014/12/15/judges-question-apple-ebook-verdict-and-amazons-role/
http://gigaom.com/2014/12/15/judges-question-apple-ebook-verdict-and-amazons-role/#commentsMon, 15 Dec 2014 20:45:39 +0000http://gigaom.com/?p=900372In a new twist in the long running antitrust case against Apple, an appeals court on Monday cast doubt on the Justice Department’s theory that the company brokered an illegal conspiracy among book publishers, and asked instead why the government’s focus has not been on Amazon.

The 90-minute hearing, which took place at the Second Circuit Court in Manhattan, represented a major shift in momentum in a case that has until now gone completely against Apple. On Monday, the three appeals court judges suggested that District Judge Denise Cote might have been too quick to conclude that Apple’s pricing arrangements with five publishers violated antitrust laws.

“Would it not matter that all those people got together to defeat a monopolist? It’s like the mice that got together to put a bell on a cat,” U.S. Circuit Judge Dennis Jacobs told the Justice Department’s lawyer, Malcolm Stewart.

The cat in question here is [company]Amazon[/company], which controlled over 90 percent of the ebook market in early 2010 when Apple and the publishers introduced “agency pricing,” which lets publishers set an ebook’s retail price and pay the publisher a commission. Amazon had previously used the wholesale model for all ebooks.

On Monday, Apple’s lawyer Theodore Boutros urged the appeals court to regard the pricing tactic as a legitimate business arrangement used to “come into a market dominated by a monopolist.”

The judges appeared to give weight to this suggestion, and to accept Boutros’ contention that a brief price spike, which damned Apple and the publishers before Judge Cote, should not result in an automatic finding of illegal price-fixing. Instead, Boutros said the price spike was limited only to the five publishers, and that the overall effect of Apple’s entry to the ebook market dramatically benefited consumers since many more players were willing to enter the market.

The appeals court judges also expressed skepticism over Stewart’s repeated attempts to liken the agency pricing arrangements to a criminal drug conspiracy in which [company]Apple[/company] was the driver.

“When you’re dealing with the illegal drug industry, you’re looking at one of the few areas where the law doesn’t look favorably on new entrants,” said Circuit Judge Debra Livingston.

$450 million settlement at risk

If the appeals court decides to disturb Judge Cote’s verdict, their ruling would have an immediate ripple effect on a related legal proceeding, involving class action lawyers and state governments, in which Apple has agreed to pay out $400 million to consumers and another $50 million in legal fees.

But in an unusual arrangement, the $450 payout is contingent on the Second Circuit upholding the verdict. If the appeals court judges remand the verdict, the payout could drop to a total of $70 million and, if they reverse it entirely, the payout will be nothing.

At the hearing, Boutros suggested that the appeals should overturn Court’s ruling as a matter of law, or at least remand it to a different judge.

The major legal issue at stake turns turns on competing antitrust doctrines known as “per se” versus “rule of reason” — which specify how courts should assess situations in which companies are found to have colluded on a given business issue.

The appeals court, however, may be hard-pressed to reverse Judge Cote, who found in a 160-page decision that Apple was liable under either standard.

In the event the appeals court does remand or reverse, its finding is likely to turn on whether Apple and the publishers’ behavior was justified in the context of what Judge Jacobs called a “new entrant breaking the hold of a monopolist” using “arguably predatory” tactics.

For the publishers, the outcome will not effect their liability since they have already agreed to pay out millions as a result of voluntary settlements.

A five-year cooling off period

A portion of Monday’s arguments were taken up by lawyers from Simon & Schuster and Macmillan, which are two of the five publishers that were caught up in the antitrust investigations (the others are Hachette, HarperCollins and Penguin, which has since merged with Random House).

Macmillan and Simon & Schuster were there to object to a part of Judge Cote’s order in which Apple must engage in a five-year “cooling off period” with the publishers, and engage in only arms-length negotiations. For practical purposes, this means that the publishers will not be able to limit Apple’s ability to engage in discounting, which could in turn complicate their negotiations with other retailers.

The publishers claim this five-year provision is unfair since they are this month coming to the end of their own two-year settlements with the government. They claim that the Justice Department is, in essence, reneging on its earlier agreement with them since the five-year arrangement with Apple will have knock-on effects in their negotiations with other ebook retailers.

The publishers asked the judges to excise a part of Judge Cote’s order that applies the five-year cooling-off period and, if necessary, to make a special preliminary decision on this matter so their pricing strategies are not compromised.

Finally, the appeals court judges also mulled what to do with the special monitor that Justice Cote appointed to oversee Apple’s compliance. The appointment has drawn criticism because the monitor selected by Cote was a friend of the judge who lacked antitrust experience and hired a special advisor at extra cost.

The appeals court said it will reserve its decision, meaning a ruling is likely to come sometime in 2015.

]]>http://gigaom.com/2014/12/15/judges-question-apple-ebook-verdict-and-amazons-role/feed/7Nature journals now free, as open access model gains steamhttp://gigaom.com/2014/12/02/nature-journals-now-free-as-open-access-model-gains-steam/
http://gigaom.com/2014/12/02/nature-journals-now-free-as-open-access-model-gains-steam/#commentsTue, 02 Dec 2014 15:38:11 +0000http://gigaom.com/?p=897467The public now has unprecedented access to dozens more research journals, including the prestigious Nature, as publisher Macmillan announced that 49 of its titles will be available through a free content-sharing model starting Tuesday.

Under the terms of a one-year pilot program, journal subscribers and media outlets will be able to create links to articles from the journals — which also include Nature Medicine and Nature Genetics — on ReadCube, a platform for viewing and annotating PDF’s, and share them with anyone on the web.

“[It] marks an attempt to let scientists freely read and share articles while preserving NPG’s primary source of income — the subscription fees libraries and individuals pay to gain access to articles,” the publisher explained.

Even though initial access to the articles is limited to subscribers and media outlets, the announcement means that, for practical purposes, everyone will eventually have easy access to the material through shareable web links.

This is good news for the public but also for scholars, many of whom have long chafed at publishers’ practice of slapping expensive subscription walls around articles for which the authors are not paid.

The Nature decision also comes amid growing support for an “open access” model for many types of research. The Gates Foundation, for instance, recently required grant recipients to make their work publicly available, while U.S. government rules now mean that publicly funded health studies can’t be locked down by copyright. More broadly, many are embracing what the Economist dubbed the “academic spring” in 2012, in which professors began to boycott journals that impose onerous copyright conditions.

The story of Aaron Swartz, who committed suicide while facing an aggressive prosecution for unauthorized downloading of JSTOR journals, may also be another catalyst in the turn to open access.

]]>http://gigaom.com/2014/12/02/nature-journals-now-free-as-open-access-model-gains-steam/feed/1Big-5 publisher Macmillan makes many more ebooks available to librarieshttp://gigaom.com/2013/10/17/big-5-publisher-macmillan-makes-many-more-ebooks-available-to-libraries/
Thu, 17 Oct 2013 17:12:47 +0000http://gigaom.com/?p=705726Less than a year after launching a pilot to make about 1,200 crime and mystery books available to libraries, Big-5 publisher Macmillan confirmed Thursday that it’s opening up the program: The publisher will make all of its backlist ebooks (books older than a year) available to libraries, for a total of about 11,000 titles. Newer ebooks will still not be available.

“Titles will be available to libraries through [digital distributors] OverDrive, 3M and Baker & Taylor, and also Recorded Books for audio. There were no reported changes in the model Macmillan uses or pricing at this time. Once purchased by a library, e-book titles will be available to lend for two years or 52 lends, whichever comes first, and titles in the pilot were priced at $25.”

]]>Penguin makes its ebooks available to libraries through Overdrive once againhttp://gigaom.com/2013/09/25/penguin-makes-its-ebooks-available-to-libraries-through-overdrive-once-again/
http://gigaom.com/2013/09/25/penguin-makes-its-ebooks-available-to-libraries-through-overdrive-once-again/#commentsWed, 25 Sep 2013 18:46:04 +0000http://paidcontent.org/?p=233333About a year and a half after Penguin stopped making ebooks available to libraries through digital distributor Overdrive, the companies have resumed their relationship, Overdrive announced Wednesday. That means that Penguin’s 17,000 ebooks are now available to U.S. libraries that work with Overdrive.

Overdrive is the largest digital library distributor in the United States — if your public library lends ebooks, it is probably through Overdrive. Penguin had officially ended its relationship with Overdrive in February 2012. Since then, it’s worked with Overdrive competitor 3M Cloud Library. But 3M Cloud Library works with many fewer libraries than Overdrive, so the effect was that most library patrons did not have access to Penguin ebooks.

Penguin had never stated exactly why it stopped working with Overdrive, but it had cited security concerns. One of those was likely the fact that Overdrive had allowed library patrons to check out Penguin Kindle books wirelessly via Amazon’s website. In Overdrive and Penguin’s new relationship, that is no longer allowed: Overdrive noted that “Penguin eBooks are available for Kindle (US) via USB side-loading only.” In other words, patrons will no longer be sent to Amazon’s website from Overdrive. Instead they’ll have to download the ebooks and transfer them manually to their Kindles.

Overdrive says Penguin will charge libraries $18.99 for “popular new releases” and $5.99 to $9.99 for older titles. An ebook can only be checked out by one user at a time and the library will have to buy a new copy after a year.

Other publishers also place restrictions on ebook library lending. Random House makes all of its ebooks available to libraries, but at prices as much as three times higher than the retail price. HarperCollins allows its ebooks to be checked out 26 times before the library has to buy a new copy. Hachette makes all its ebooks available to libraries and charges more than the retail price, but a library only has to buy a copy once. Macmillan is running a two-year trial that makes 1,200 older ebooks available to libraries. Simon & Schuster does not make its ebooks available to libraries.

]]>http://gigaom.com/2013/09/25/penguin-makes-its-ebooks-available-to-libraries-through-overdrive-once-again/feed/1Heads up, ebook buyers: Here’s how much you’re likely to get in the Apple ebook settlementhttp://gigaom.com/2013/08/30/heads-up-ebook-buyers-heres-how-much-youre-likely-to-get-in-the-apple-ebook-settlement/
http://gigaom.com/2013/08/30/heads-up-ebook-buyers-heres-how-much-youre-likely-to-get-in-the-apple-ebook-settlement/#commentsFri, 30 Aug 2013 20:09:17 +0000http://gigaom.com/?p=685672All five publishers who were accused of conspiring with Apple(s aapl) to set ebook prices at the launch of the iBookstore have settled with the federal government and with the states, and until now it has been unclear how much money customers would get from those settlements. On Friday, though, the states released new documentation laying out how much people who made qualifying purchases are likely to receive.

Short answer: If the states’ settlement with the publishers is finalized, customers who bought an ebook from any one of the five settling publishers between April 1, 2010 and May 1, 2012 will be eligible for a refund of up to $3.06 per book. If you’re one of those people, you’ll get that money as a credit to the digital bookstore where you purchased the book.

It’s taken awhile to even get to this “final” — but still preliminary — dollar amount. That’s because HarperCollins, Hachette and Simon & Schuster settled with the Department of Justice right away, back in April 2012, but the remaining two publishers in the lawsuit — Penguin and Macmillan — didn’t agree to settle until December 2012 and February 2013, respectively. Penguin and Macmillan’s settlements have been approved, but not finalized.

So last year, without Penguin and Macmillan included in the settlement, it appeared that eligible consumers would get a refund between $0.25 and $1.32 per ebook. Once Macmillan and Penguin decided to settle, though, the total settlement amounts increased — to $162.25 million — and so the payments will be bigger.

Assuming the Macmillan and Penguin settlements go through — they’re set to be finalized on December 6, 2013 — anybody who bought an ebook from Hachette, HarperCollins, Simon & Schuster, Penguin or Macmillan between April 1, 2010 and May 1, 2012 will get a refund of $3.06 if that ebook was a New York Times bestseller at any point in its publishing history, and $0.73 per ebook that was never a NYT bestseller.

How will you know if you qualified for the settlement? You should receive an email from the ebook retailer. You might actually have received this email last year, if you made qualifying purchases from HarperCollins, Hachette or Simon & Schuster. But if you bought a qualifying ebook from Penguin or Macmillan, you probably did not receive the email notice until today.

Regardless of which publisher you purchased an ebook from, though, your settlement amount will be the same. And you’ll receive it as a credit to the digital bookstore that you bought the ebook from — Kindle (s AMZN), Google (s GOOG) or whomever.

[scribd id=164316260 key=key-2407pa0usatm0l3a5oej mode=scroll]
]]>http://gigaom.com/2013/08/30/heads-up-ebook-buyers-heres-how-much-youre-likely-to-get-in-the-apple-ebook-settlement/feed/7Publishers protest DOJ’s proposed punishment for Apple, saying it hurts them toohttp://gigaom.com/2013/08/08/publishers-protest-dojs-proposed-punishment-for-apple/
http://gigaom.com/2013/08/08/publishers-protest-dojs-proposed-punishment-for-apple/#commentsThu, 08 Aug 2013 12:25:31 +0000http://gigaom.com/?p=677502The five publishers who settled with the federal government in the ebook pricing case objected to the government’s proposed injunction for Apple (s AAPL) in a joint court filing Wednesday. They argue that the injunction modifies the settlements that they already reached with the government, and does more to punish publishers than to punish Apple.

Apple had objected to the proposed injunction on Friday. A federal judge found Apple guilty of conspiring with publishers to fix ebook prices in July.

The publishers — Penguin, Hachette, Macmillan, Simon & Schuster and HarperCollins — already reached settlements with the DOJ that allow retailers to discount their ebooks for two years and prohibit most favored nation clauses for five years. These settlements are already in effect; in fact, retailers have been discounting HarperCollins ebooks for nearly a year now. After two years, the existing settlements allow publishers to return to an agency pricing model where they set an ebook’s price and the retailer can’t discount below that price.

The injunction that the DOJ proposed last week, however, would force publishers to let Apple discount its ebooks for five years, not just two. While the injunction only specifically mentions Apple, it would affect publishers’ contracts with all retailers, including Amazon (s AMZN), because the publishers would not want to offer different terms to Apple than they do to other retailers.

“The provisions [in the injunction] do not impose any limitation on Apple’s pricing behavior at all,” the publishers write. “Rather, under the guise of punishing Apple, they effectively punish the Settling Defendants by prohibiting agreements with Apple using an agency model.” Thus the proposed injunction “directly conflicts” with the settlements that the publishers already reached, and “unreasonably and unnecessarily restrains the Settling Defendants’ independent business decisions beyond the scope and time provided for in their respective consent decrees.”

The publishers conclude that the DOJ is “attempting to impose a specific business model on the publishing industry, despite their express and repeated representations that they would play no such role.” They ask Judge Denise Cote, who is overseeing the case, to reject the DOJ’s proposed injunction.

]]>http://gigaom.com/2013/08/08/publishers-protest-dojs-proposed-punishment-for-apple/feed/6Apple could pay nearly $500 million in ebook casehttp://gigaom.com/2013/07/25/apple-could-pay-nearly-500-million-in-ebook-case/
http://gigaom.com/2013/07/25/apple-could-pay-nearly-500-million-in-ebook-case/#commentsThu, 25 Jul 2013 15:14:43 +0000http://gigaom.com/?p=671645Apple (s AAPL) could get smacked with a $500 million bill from the states and class action lawyers in the ebook pricing suit, based on the amounts that the settling publishers have already paid out.

Earlier this month, federal judge Denise Cote found Apple guilty of colluding with five publishers to fix ebook prices at the launch of the iBookstore. The five publishers named in the case — Hachette, Penguin, Random House, HarperCollins and Simon & Schuster — have already settled and paid damages to the states and in the class action suit. In a document that the court made public Tuesday, the Texas attorney general provided Judge Cote with a chart showing the amounts that the states have agreed to pay. The red markup is by me:

The chart shows that the publishers have paid out over $166 million so far. Earlier this month, a lawyer from Hagens Berman — the class action firm in the case — told my colleague Jeff Roberts that Apple would likely face a liability payment of harm to consumers times three, minus the $166 million already paid out by publishers. On Wednesday, Law360 reported (paywall) the same thing, calculating that if Apple loses its appeal it would face about $490 million in damages. I annotated the chart above with those figures.

Referring to the chart above, NYU law professor Harry First told Law360, “Just looking at the percentages straight, the plaintiffs at least appear to have some sort of good strategy in terms of settlements, so the later settlements don’t get as good a deal. That means Apple’s in for more of a jolt.”

]]>http://gigaom.com/2013/07/25/apple-could-pay-nearly-500-million-in-ebook-case/feed/6Publishers to testify against Apple in price-fixing trialhttp://gigaom.com/2013/05/15/publishers-to-testify-against-apple-in-price-fixing-trial/
http://gigaom.com/2013/05/15/publishers-to-testify-against-apple-in-price-fixing-trial/#commentsWed, 15 May 2013 18:02:39 +0000http://paidcontent.org/?p=229512The federal government, in a trial scheduled to begin on June 3, will rely on testimony from CEOs of New York’s largest publishing houses to argue that Apple(s aapl) brokered a conspiracy to raise the price of ebooks and harm its rival, Amazon(s amzn).

According to a court filing released on Tuesday, CEOs of the same publishing houses that once rejected the price-fixing theory will now offer evidence to suggest they colluded with Apple in order to increase ebook prices. The case involves allegations that Apple and its late CEO Steve Jobs organized a conspiracy with the Big Six publishers to introduce a commission-style pricing system in order to wrest pricing power from Amazon.

The new filing, posted below, says that the CEOs of Macmillan, Hachette, Harper Collins, Simon & Schuster and Random House will testify about various aspects of Apple’s role in the alleged conspiracy. All of these companies with the exception of Random House were also named in the antitrust lawsuit brought by the Department of Justice and agreed to settle the case last year.

The government’s new filing says Macmillan CEO John Sargent is expected to testify that:

“[T]he deal that 5 of us did with Apple meant someone was gonna have to do it. Just luck of the draw that it was me. . . . The optics make it look like I stood alone, but in the end I had no doubt that the others would eventually follow.”

Such evidence could prove damaging to Apple, which is also expected to confront testimony from Amazon executives. Apple will also be forced explain a growing list of possibly incriminating comments and emails. One of these, cited by the government to show Apple played an active role in the price changes, describes SVP of internet software and services Eddy Cue telling Jobs:

“In the end, they want us and see the opportunity we give them but they’re scared to commit! It [has] less to do with the terms and more about the dramatic business change for them. . . . They just have to get some balls.”

The new filing also includes the views of other prominent executives, including News Corp’s Rupert Murdoch. According to Harper Collins CEO Brian Murray, Murdoch was “pissed at Amazon” and wanted to “screw Amazon.”

In its own filings, Apple maintains its long-held position that it is not a “ringmaster” of a conspiracy, as the government alleges, but that it simply offered the same pricing system, which is based on a 30 percent commission, that it offers to any company that sells through its iTunes store. Apple also maintains that it helped to create competition at a time when Amazon dominated the ebook market.

The next important step of the proceedings will take place on May 23, when the parties meet before U.S. District Judge Denise Cote for a pre-trial conference.

Here’s the filing (all 156 pages of it!) with some of the key points underlined:

Here are a few examples of ebooks and the discounts they are receiving at various retailers. Note that Kindle (s AMZN), Nook (s BKS) and the iBookstore (s AAPL) are matching each other’s discounts, while in most cases Kobo and Google (s GOOG) hadn’t begun discounting as of Thursday afternoon.

Title

Pub Date

Ebook list price

Kindle

Nook

iBookstore

Kobo

Google

Killing Lincoln (O’Reilly, Dugard)

9/2011

$12.99

$9.99

$9.99

$9.99

$12.99

$12.99

The Silver Linings Playbook (Quick)

10/2012

$9.99

$7.99

$7.99

$7.99

$9.99

$9.99

A Memory of Light (Jordan, Sanderson)

4/2013

$14.99

$13.49

$13.49

$14.99

$14.99

$13.49

Ender’s Game (Card)

1st ebook ed. 4/2010

$6.99

$4.98

$5.99

$5.99

$6.99

$6.99

According to the terms of the settlement, Macmillan — like the other settling publishers — can’t restrict retailers like Amazon from setting, changing, or lowering ebook prices for two years. Though Macmillan only settled in February, its settlement gave it a back-dated head start on the two-year period, running from December 18, 2012 — the same date that Penguin agreed to settle.

Speaking of Penguin: Retailers still have not begun discounting its ebooks, Publishers Lunch notes, even though it settled nearly four months ago. Amazon still lists Penguin’s ebook prices as being set by the publisher.

Discounts on ebooks from Hachette, Simon & Schuster and HarperCollins — who settled with the DOJ back in April 2012 — have been in effect for several months. In most cases, retailers haven’t offered steep discounts on any of the settling publishers’ titles, and to my knowledge, we haven’t yet seen any of the bundling promotions or ebook giveaways that are largely allowed by the settlement.